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Key Takeaways
- The U.S. economy created 177,000 new jobs in April. This is a slowdown from 185,000 jobs added in March (which was revised downwards), but it’s still higher than the 133,000 predicted by forecasters.
- The unemployment rate is still relatively low at 4,2%, the same level as in March.
- The report showed that the job market remained steady despite the uncertainty and pessimism created by President Donald Trump's tariff campaign.
The job market was resilient in April, despite the uncertainty caused by President Donald Trump’s unpredictable tariff campaign.
Bureau of Labor Statistics announced Friday that the U.S. economy created 177,000 new jobs in April. Dow Jones Newswires, The Wall Street Journal and Dow Jones Newswires conducted a survey with economists. The results showed that this was a decrease from the 185,000 jobs reported in March. However, it was still more than 133,000 jobs forecasters expected. The unemployment rate remained at 4,2%, which is not a high rate by historical standards.
The jobs report was highly anticipated, as financial markets and Federal Reserve officials are examining the impact Trump’s drive to raise import taxes will have on the economy.
A sharp drop in job growth could have been an early warning of a recession. The steady growth in jobs showed that the hiring markets may be healthy enough for the moment to remain afloat.
Trump’s tariffs, which were imposed on many U.S. partners in April, have shook up the outlook of the economy. Surveys show that businesses and individuals are increasingly concerned about rising prices and supply-chain disruptions. This could negatively impact the job market and even cause a recession.
Tariffs may not have a major impact on employment, but they could still cause job losses
If a spike in unemployment is on the way, it could be too soon to see it in hard economic statistics.
Noah Yosif is the chief economist of the American Staffing Association. In a comment, he said that the April jobs report showed the labor market to be in a good position. “However the jury is still out on whether or not the economy will be capable of absorbing potential shocks due to tariffs.”
The tariffs are intended to support U.S. manufacturing, encouraging companies to build their own factories in the U.S. instead of importing products from abroad. Ironically, the manufacturing industry could be the first one to feel the pinch.
According to a survey released by the Institute for Supply Management on Thursday, managers in this industry reported that they had laid off workers in April. Friday's jobs report repeated this pattern, reporting that manufacturing lost 1,000 jobs after growing in March.
Economists, trade experts and others have predicted that tariffs will harm employment, especially manufacturing. Costlier materials and parts imported by U.S. companies will put pressure on them, and trade barriers set up by other countries in retaliation may hurt exporters.
"The impact of trade tensions on the U.S. job market will likely show up gradually," Ali Jaffery, an economist at CIBC, wrote in a commentary. "The headlines and surveys are telling us that first response of affected businesses is to cut costs, delay investment and pause unnecessary hiring, hopeful for a further moderation of tariff policy. There are also a significant portion of firms unaffected by the trade war in these early innings, and will start to the feel the stress over time."
Update, May 2, 2020: This article has been updated since publication to include additional comments from experts.
